Question

Clopack Company manufactures one product that goes through one processing department called Mixing. All raw materials are introduced at the start of work in the Mixing Department. The company uses the weighted-average method of process costing. Its Work in Process T-account for the Mixing Department for June follows (all forthcoming questions pertain to June):

Work in Process—Mixing Department
June 1 balance	36,000	Completed and transferred to Finished Goods	?
Materials	122,440
Direct labor	81,500
Overhead	99,000
June 30 balance	?

The June 1 work in process inventory consisted of 5,200 units with $19,130 in materials cost and $16,870 in conversion cost. The June 1 work in process inventory was 100% complete with respect to materials and 60% complete with respect to conversion. During June, 37,700 units were started into production. The June 30 work in process inventory consisted of 8,400 units that were 100% complete with respect to materials and 50% complete with respect to conversion.

Required:

1. Prepare the journal entries to record the raw materials used in production and the direct labor cost incurred.

2. Prepare the journal entry to record the overhead cost applied to production.

3. How many units were completed and transferred to finished goods during the period?

4. Compute the equivalent units of production for materials.

5. Compute the equivalent units of production for conversion.

6. What is the cost of beginning work in process inventory plus the cost added during the period for materials?

7. What is the cost of beginning work in process inventory plus the cost added during the period for conversion?

8. What is the cost per equivalent unit for materials?

9. What is the cost per equivalent unit for conversion?

10. What is the cost of ending work in process inventory for materials?

11. What is the cost of ending work in process inventory for conversion?

12. What is the cost of materials transferred to finished goods?

13. What is the amount of conversion cost transferred to finished goods?

Answer 1

ACCOUNT TITLES AND EXPLANATION 1) DEBIT CREDIT [$122440 $81500] Work in Process Mixing Department $203,940 $122,440 $81,500 Raw materials Wages Payable ACCOUNT TITLES AND EXPLANATION 2) CREDIT DEBIT Work in Process Mixing Department Factory Overhead $99,000 $99,000 Beginning inventory, units Add: Units added currently 3) 5,200 37,700 Less: Ending inventory, units -8,400 Units completed and transferred out 34,500 4) & 5) Under weighted average method, equivalent units are to be calculated only for units completed & transferred out and units lying as ending work in process as it is assumed that the units once entered into the process become integral part of total units and no segregation between units transferred from beginning work in process and introduced during current process. Conversion cost includes Labor Overheads. +

Part-4 Part-5 % Complete Conversion Conversion % Complete Material EUP- EUP- Particulars Units Material Completed and transferred out Ending work 4) & 5) Equivalent Units of Production [34500 units x 100 %; 34500 units x 100 %] [8400 units x 100 % ; 8400 units x 50%] 34,500 100% 34,500 100% 34,500 8.400 50% 100% 8,400 4,200 process 38,700 42,900 Part-6 Part-7 Cost per equivalent units of production Cost of Beginning WIP Cost added during the month 6) & 7) Cost of beginning WIP plus cost added Equivalent units of Production (EUP) 8) & 9) Cost per Equivalent units of Production Conversion $16,870 $180,500 [Conversion Direct Labor Overhead $81500+$99000 $180500] $197,370 6) to 9) Material $19,130 $122,440 $141,570 [As computed EUP schedule presented abovel [Materials $141570/42900 units = $3.30; Conversion $197370/38700 $5.10] 42,900 38,700 $3.30 $5.10 Part-8 Part-9 Cost per 10) & 11) Cost of ending work-in-process EUP Totals EUP 10) 12) Material 11) 13) Conversion [8400 units x $3.30] [4200 units x $5.10] $3.30 $5.10 $27,720 $21,420 8,400 4,200 Cost per 12 & 13) Cost of goods completed transferred EUP Totals EUP $113,850 $175.950[34500 units x $5.10] $3.30 12) Material [34500 units x $3.301 34,500 $5.10 13) Conversion 34,500